What a proforma invoice is
A proforma invoice looks exactly like an invoice — same layout, same line items, same totals — but it is issued before the sale is complete. It says: this is what the invoice will look like. It is not a demand for payment of an existing debt, and it is not recorded as a sale in your accounts.
When to use one
- Payment in advance. The customer’s finance process needs an invoice-shaped document before it can release funds, but you are not prepared to book the sale until they pay.
- Imports and customs. Shipping and customs procedures frequently require a proforma before goods move, so duties and taxes can be assessed.
- Budget approval. An internal approver needs a document that looks like the final invoice in order to authorise the spend.
- New customers. Where you want payment cleared before dispatch, without giving credit.
| Feature | Quotation | Proforma invoice | Invoice |
|---|---|---|---|
| Purpose | Offer a price | Show the invoice in advance, usually to obtain payment | Request payment for a completed supply |
| Recorded as a sale | No | No | Yes |
| Creates a debt | No | No | Yes |
| Numbering | Quotation series | Its own series, e.g. PI-001 | Invoice series |
| Typical use | Winning the work | Advance payment, customs | Getting paid for delivered work |
What to put on a proforma invoice
- The words “Proforma Invoice”, prominently
- Its own reference number, from a separate series
- Your details and the customer’s details
- Itemised lines with quantities and prices, exactly as the real invoice will show them
- Tax shown as it will be charged
- The total payable
- A validity period — prices and availability move
- Payment instructions
- For international shipments: country of origin, weights, and tariff classification if required
- A note that it is not a tax invoice and no payment is yet due against it
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Issuing the real invoice afterwards
Once payment is received or the goods are dispatched, issue a proper invoice from your invoice series, referencing the proforma number. That is the document that gets recorded as a sale, and it is the one your customer needs if they are reclaiming tax — a proforma generally does not qualify as a tax invoice.
A common and expensive mistake is treating a paid proforma as the end of the paperwork. Your accounts need the invoice, and your customer may be unable to reclaim tax without one. Always follow a paid proforma with a numbered invoice.
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Questions
Is a proforma invoice a legal invoice?
Generally not for tax purposes. It does not create a debt and is usually not valid for reclaiming tax. It is a preview of the invoice, issued before the supply is complete.
Can a customer pay against a proforma invoice?
Yes — that is often exactly why it is issued. Follow the payment with a proper invoice from your invoice series.
What is the difference between a proforma invoice and a quotation?
A quotation offers a price and invites acceptance. A proforma assumes the price is agreed and presents the transaction as it will be invoiced, usually to obtain payment or clear customs.
Do I number proforma invoices?
Yes, from their own series such as PI-001, kept separate from your invoice numbering so a proforma can never be mistaken for a booked sale.
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